Bid for bling has a shady past

By Dane Schiller

Published 11:41 pm, Tuesday, December 18, 2012

HOUSTON — A silver Porsche with a small scratch on its convertible top. Six slightly used red leather home-theater seats for the man cave. A pair of Indo-Isfahan-style wool rugs and a Viking wine cellar.

Once the pricey toys of criminals, they are some of the government-seized treasures sold at auction last week in Houston as part of an ongoing series of sales across the nation.

Ranches, buildings, jewelry, paintings, boats, planes and other property — all previously bought with dirty money or used while breaking the law — are sold in various U.S. cities to raise money for police agencies as well as compensate victims.

Auctions — along with cash seized from criminals — garnered $1.5 billion for victims in 2012, and another $616 million for law enforcement agencies, according to the U.S. Marshals Service, which runs the program.

The cash funneled to police can be used for everything from buying new patrol cars to covering the cost of training but can't go for pay raises. Those bidding on the goods are not allowed to buy back property on behalf of the criminal defendants who lost the property in the first place. If they do, they could face federal charges.

Among the most famous items ever sold was a $550,000 diamond engagement ring that belonged to the wife of imprisoned Ponzi king Bernard Madoff. His suits, shoes, ties and even underwear were auctioned away.

In April, an auction drew 4,000 people to a small town in Illinois for the sale of 400 horses owned by a woman who stole $53 million during her rogue career as a city comptroller.

And this week, U.S. officials announced that a $640,000 South Padre Island condo that belonged to Tomas Yarrington, former governor of Tamaulipas, Mexico, was forfeited to the U.S. government. It, too, likely will be auctioned.

“When you take away their assets and their money, it really hurts them more than putting them in jail,” said Jason Wojdylo, who oversees asset forfeiture nationwide for the U.S. Marshals Service.

“We can put people in jail all day every day, and we do that quite well,” Wojdylo said. “However, we recognize that there are people in society who are willing to go to prison if they can still provide for their families, their girlfriends and themselves when they are released from prison.”

Other items waiting to one day be auctioned include pricey rides owned by Raul Madrigal, a U.S. citizen who fled from Houston to Mexico three years ago. He was captured and recently sent to the U.S. to face drug-trafficking charges.

His Bentley, two Maseratis, two BMWs, a 6.5-carat diamond ring and a customized T-Rex motorcycle with ostrich skin seats were among many items confiscated after he fled. They remain in federal custody pending the outcome of the charges.

Among them:

A Porsche Carrera that was part of a fraud investigation of the “Goodfellas Grocery,” in Louisiana. Two brothers were sent to federal prison.

An Arctic Cat all-terrain vehicle captured as part of a cocaine trafficking and money-laundering case that stretched from Texas to Tennessee.

A Dodge Ram that was part of a ring trafficking heroin between Houston and New Orleans.

Jeff Conway, a general manager for Apple Towing, the company that hosts some of the auctions from its property, said auctions are held several times a year, but the number of people who show up is unpredictable.

“Every one is different, it can be 10, it can be 500,” he said.

Items are sold as they were captured — some are showroom clean, others may have dents, scratches or mud.